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The biggest mistakes brokers make

Peter Dunworth of Super Fund Pro reveals the 5 biggest mistakes brokers make and how a few small adjustments can boost your business.

Video transcript below:

Donna Sawyer, Australian Broker TV
Donna Sawyer: If you are an experienced broker and you think business is sailing smoothly, you are probably in need of some tough love. That’s the view of Peter Dunworth of Super Fund Pro, who says now is the time to change your business model and start diversifying your revenue streams.

Peter Dunworth, Super Fund Pro

Peter Dunworth: This is the best time to be a mortgage broker that, if you are in this space, you know there has been a lot of negative talk over the last 5 years. You have seen commissions drop 30%, there has been increased competition, the bank lending has gotten a whole lot more competitive with your typical brokers. However, if you are in this space, there has been no better time to be here, because there is a huge opportunity under NCCP to really turn that around and have the best of the years and the best people we have spoken to in the industry agree that it’s literally like 1999 all over again and they were the golden years for the industry and we believe that literally they are just around the corner. It just takes a few small or minor tweaks to your existing business model and they can have literally a phenomenally successful business that competes with all of their partners.

Donna Sawyer: He says too many brokers make the mistake of failing to value their service and in turn to communicate their value to clients.

Peter Dunworth: Our brokers had a business that’s been premised on a free service to the community or to their clients. However, there is, that was 20 years ago and the business has actually moved on and does a lot more than just arrange finance now. So we are still in that model that we expect things to be free or the clients expect things to be free. However, with a free service clients don’t really understand what’s involved in getting a mortgage. So it’s far more complicated than what clients say which is signing of an application form and then submitting some supporting documentation to the lender that actually is a little bit more complicated in that, there is a whole lot that goes on behind the scenes, yet mortgage brokers as an industry don’t do a very good job of explaining all that’s involved in actually getting a loan approved and coming to settlement day and having that ready to settle.

Donna Sawyer: He says it’s vital brokers ensure they are the clients’ number one trusted advisor.

Peter Dunworth: The best in the industry are the client’s number one trusted advisor, but as far as an industry goes, when we compare mortgage broking compared to accounting, financial planning, the legal industry and then mortgage broking, we would sit fourth out of that. So a mortgage broker would rank fourth, number one you would have the accountants, number two would be solicitors, then you would have financial planners and as a general rule, a distant fourth would be the mortgage brokers. There is an opportunity to change that perception and we believe that mortgage brokers do a whole lot more than any of the other industries, particularly with the transaction. Yet as a general rule there is perceived lack of respect for the industry as a whole.

Donna Sawyer: Peter Dunworth says small adjustments can revolutionise a tired business model.

Peter Dunworth: On the back of NCCP brokers are now licensed or qualified to give their advice and charge a fee for that. You are licensed to give effectively cash flow advice, because you are now allowed to do that under NCCP and a range of other services. So the best brokers in the industry are already doing these things and whether or not they are charging for it is another thing. It’s usually a value add.

Donna Sawyer: This is Donna Sawyer reporting for Australian Broker TV.